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On the morning of Dec. 7, 1941, Joseph P. McDonald manned the switchboard at Fort Shafter in Hawaii when he received the alarming message that radar had detected a large number of planes approaching from the north, heading fast for Oahu.
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Motorists who use the Pango mobile app to pay at parking meters in Scranton will get reimbursed for any inadvertent overcharges since Sept. 1, the new operator of the city’s parking system said.
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Scranton police and firefighters went from earning minimum wage two weeks ago to earning a full paycheck this week, plus a 2 percent raise, officials said.

The raises, which were mandated in a landmark state Supreme Court arbitration award in October that favored the unions, will be included in police and firefighter paychecks on Friday, according to Mayor Chris Doherty and city Business Administrator Ryan McGowan.

That's because the city will be able to make a full payroll this week, but still won't be able to pay back wages that were withheld July 6 when only minimum wages were paid, they said.

Due to the city's cash crunch, Mr. Doherty indefinitely slashed nearly 400 workers' wages to the federal minimum of $7.25 per hour starting with their July 6 paychecks.

In preparation of Friday's paychecks, payroll processing began Wednesday with the wiring of funds to cover a full payroll that amounts to around $1.08 million, officials said.

Employees are paid every other week. Since the last payroll, various tax revenues have come in allowing the city to make a full payroll this week, but there was not enough funds to cover wages that were withheld July 6, they said. Still, a full payroll for this period gave both city officials and employees a bit of a breather.

"It's better than $7.25 an hour," said fire union President John Judge. "It's some good news, I guess, with a question mark."

That's because the city's perilous financial situation remains far from resolved, and whether the city will be able to make a full payroll on the next payday, Aug. 3, or thereafter, remains to be seen, officials said.

"It's always dependent on money I have (on hand)," Mr. Doherty said. "That's why we have to get council to fund their budget. There's still a $16 million hole in budget."

After wiring out a full payroll, the city on Wednesday had $400,000 left in the bank and $4.2 million in unpaid bills, Mr. McGowan said. Various revenues received in the past two weeks included earned income taxes, also called wage taxes, as well as real estate, business privilege, mercantile and real estate transfer taxes, he said.

The unpaid bills include dozens of items, such as fuel for vehicles, auto parts, landfill fees and health care coverage, to name a few, and the city is trying to pay at least some portion of the bills to keep vendors at bay, he said. For example, the city still owes some $2 million to Blue Cross of Northeastern Pennsylvania, which had previously warned of a lapse in coverage by July 13. But the city paid some of the bill and Blue Cross extended coverage to July 27, Mr. McGowan said.

The cash crunch may ease a bit in early August, when the bulk of second-quarter wage tax collections should flow into city coffers, said the mayor and Mr. McGowan.

"It (wage tax submissions) should hopefully pick up in the next two weeks," Mr. McGowan said. Asked if that bodes well for being able to make a full payroll on Aug. 3, Mr. McGowan said, "We hope so."

Meanwhile, the administration and council are still trying to reach an agreement on revising an Act 47 recovery plan that the city needs to be able to secure financing from lenders to plug a $16.8 million gap in this year's budget, the mayor said.

To speed up that process, the state Department of Community and Economic Development has offered a $2 million no-interest loan and $250,000 grant to the city, but only if the mayor and council can finally agree on a revised financial recovery plan by Aug. 1 and adopt legislation for it by Aug. 15.

The mayor has proposed a recovery plan with 78 percent higher real estate taxes over the next three years and a $22, two-year phase-in of a new garbage collection fee. Council, which wants more alternatives to big tax increases, has signed on for a property tax hike only large enough to make the bond payments starting in 2013 - roughly 12 percent - and no more than 10 percent in additional hikes in 2014 and 2015, depending on what money is raised by alternative revenue sources.

While the mayor and council President Janet Evans have said they have been making progress in recovery plan negotiations, Mrs. Evans said there have been some setbacks and new wrinkles.

For example, a council-sought sales tax has been removed as a revenue source by the administration, because a sales tax has not been approved by the state Legislature, Mr. McGowan said. As such, a sales tax is merely hypothetical and cannot be counted on as real revenue, but if it were to be enacted it would be used to defray tax increases, he said.

The administration also has renewed plans to lease the city's parking meters to the Scranton Parking Authority to raise $6 million, but the council majority is adamantly opposed to that, Mrs. Evans said. That's because SPA would need to borrow funds to pay for the lease, and the city would have to guarantee the SPA debt, she said.

"And that's not going to happen," Mrs. Evans said. "So, it's a ludicrous suggestion that is not going to happen, so we just have to keep working at it."

Mr. McGowan said the parking-meter lease is needed to replace revenue that the administration had been hoping to receive from selling the city's stormwater conveyance system to the Scranton Sewer Authority for $5.4 million. However, that was found to be impossible because the authority already owns the stormwater system.

"It's one step forward, two steps back," Mrs. Evans said. "From one day to the next, you don't know what to expect."

Mr. McGowan noted that the council majority does not like a parking-meter lease, but also won't raise taxes to produce revenue.

"Then she has to provide a suitable replacement (to a parking meter lease)," Mr. McGowan said. "That is what I see as a suitable replacement. I don't like it either, but we don't have an alternative at this point."

While the mayor says a revised recovery plan is necessary to assure wary banks that the city can repay debt, Mrs. Evans said she is trying to find a solution outside the local banking community, though she declined to be specific.

"The council is exploring legitimate funding sources. I'm not at liberty to say what they are," Mrs. Evans said. Asked why should she could not be more specific, Mrs. Evans said, "Because we are hoping to be successful and, if we discuss it prematurely, we could possibly jeopardize it."

The state Supreme Court ruling in October gave police and firefighters raises for 2012-14 as follows: 2 percent in January 2012 and 2 percent in July 2012, and then 2.2 percent in each of January and July in both 2013 and 2014, Mr. McGowan said.

The administration, council and unions have been negotiating a three-year extension of their respective contracts, Mr. McGowan said. An agreement had been announced by Mr. Judge at the June 28 council meeting - the day after Mr. Doherty dropped his bombshell that he would unilaterally cut the pay of nearly 400 city employees to the minimum wage.

The Supreme Court award has been pegged by the unions at $32 million owed to them. The unions have claimed that their new contracts calls for them to walk away from $15 million and accept $17 million. Those contracts are expected to be up soon for adoption by council, Mr. Judge said.

Mrs. Evans and Mr. Judge said the administration has been insisting on having an independent audit verify the unions' $32 million figure, and the court award must be included in a revised recovery plan. As a result, a question was raised at Tuesday's meeting of city officials and its recovery coordinator, Pennsylvania Economy League, about whether the DCED's Aug. 1 deadline for an accord is achievable if an audit is required, according to Mrs. Evans. She was not at the meeting but heard from council's representative, and Mr. Judge and Mr. McGowan, both of whom were at that PEL meeting.

"DCED may have to consider extending its deadline until an audit is completed of the Supreme Court award as required by the administration," Mrs. Evans said. "That was a wrench I was not expecting."

Asked if DCED would extend its deadline, DCED spokesman Steve Kratz said, "We need to fully understand the situation until we can make a determination. We will certainly take up this issue with the city, but it's pretty clear that time is of the essence and they need to get a recovery plan as soon as possible."

The DCED also has offered to broker mediation on a recovery plan between the mayor and council. The council majority has said they would want the mayor to hash out the issues in a public forum with the council. The mayor has been noncommittal on attending a public forum, but Mrs. Evans said it would not necessarily be a dealbreaker if both sides can reach an accord.

"If we're able to reach a consensus between council and mayor, then mediation wouldn't be necessary," she said. "If we're unable to reach a consensus then mediation is a fallback."

Contact the writer: jlockwood@timesshamrock.com

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